Heizo Takenaka, the economy minister, emerged today as ''economy czar'' as he took over the portfolio of financial regulator from Hakuo Yanagisawa, a minister who had opposed using public money to clean up commercial banks, which are staggering under the weight of bad loans officially estimated at $423 billion.

Tonight, in a nationally televised news conference, Mr. Koizumi seemed to give his new ''super minister'' carte blanche to try new tactics, including a bailout, to right the banks. ''I expect Takenaka to take all the necessary steps to fix the banking problems,'' he said.

The surprise appointment, part of the first cabinet shuffle since Mr. Koizumi took power almost 18 months ago, came after a weekend of contradictory policy statements by Japanese officials in Washington. After listening to this back and forth, Paul H. O'Neill, the United States Treasury Secretary, said, ''I did not come away with an understanding of how these particular interventions are going to contribute to an increase in the gross domestic product.''

Twelve years after Japanese stocks and real estate prices started to collapse, the banks have not recovered. The long-festering issue suddenly burst to the forefront two weeks ago when the Bank of Japan presented an unorthodox plan to buy company shares held by banks that were afraid that a major sell-off would depress the market.

Repeating a goal to bring Japan's deflation and bad-loan problems under control by the spring of 2005, Prime Minister Koizumi stressed his support for Mr. Takenaka, a onetime Harvard University economics scholar, saying, ''I appointed Takenaka to show the government's commitment to speed up the disposal of bad loans.''

While Mr. Takenaka does not have a seat or faction in Parliament, he rides on the popularity of Mr. Koizumi, whose government seems to have gotten a second wind. By visiting North Korea two weeks ago, Mr. Koizumi has achieved a rare feat for Japanese prime ministers: a V-shaped rebound in public opinion polls. In today's cabinet shuffle, six cabinet members, or one third, lost their posts, largely to younger politicians.

Inside the cabinet, Mr. Takenaka's only major rival for economic policy-making power is Masajuro Shiokawa, the minister of finance, who at 80 is the oldest cabinet member.

In Washington, Glenn Hubbard, chairman of the White House's Council of Economic Advisers, said he was ''particularly heartened'' by the elevation of Mr. Takenaka, whom he called ''very committed to reform.''

Some economists hailed Mr. Takenaka's elevation as a turning point for the world's second largest economy. Jesper Koll, the chief economist here for Merrill Lynch, predicted, ''I think we will look back in two years, and say, this is when the all-out attack on deflation, on the bad loans, started.''

Others were more cautious, noting that the bellwether Nikkei stock average initially soared on the news, then fell back, losing 147 points, or 1.5 percent, for the day. Skeptics predicted that Mr. Takenaka would be constrained by bureaucrats in his new agency, by politicians in Parliament, and by a public nervous about moves that would further raise Japan's 5.4 percent unemployment rate.

''Mr. Takenaka is not an elected politician, so he could easily be a target of anti-reformers,'' said Shigenori Okazaki, a political analyst here for UBS. Any use of taxpayer money would have to be approved by Parliament, he added. Parliament reconvenes in mid-October, and some of Mr. Koizumi's worst enemies are from his own Liberal Democratic Party.

While Mr. Takenaka has favored using taxpayer money to refloat some of Japan's banks, he has also favored a restructuring that would force some to close.

Three years ago, the government injected $75 billion in the banks, but did not demand major changes in bank policies and personnel.

''The financial system is in the middle of a serious malaise,'' Mr. Takenaka told reporters today. Calling for transparency to ensure public support for any use of taxpayer money, he said, ''We must not engage in things like subsidizing banks in a non-obvious way.''

Although bank stocks generally rose here today, the announcement marks more of a shift in policy direction than immediate banking relief, several economists said.

''Outright and immediate injection of taxpayer money is practically impossible,'' said Takashi Kiuchi, an economic adviser for Shinsei Bank, which was recreated with American capital and management from the ruins of a major bank that went under in the last round of bankruptcies, in the late 1990's.

Marshall Gittler, an economist here with Bank of America, said of the last round of bailouts: ''The banks didn't reform, and there was no change in their operations. The problem now is not just getting rid of this batch of bad loans, but making sure the banks change.''

With Japan's lost decade of the 1990's stretching into this decade, Mr. Koizumi told the country tonight, ''The current top priority is reviving the Japanese economy.''

With policy now concentrated in one minister, it remains to be seen if Mr. Takenaka can prevail against political and bureaucratic opponents.

''With the cabinet reshuffle, he is now the brain that coordinates policy,'' Mr. Koll said of Mr. Takenaka. ''Now let's see if he can get the body to walk.''